2334-S

AN ACT Relating to the appointment of an inspector general within the office of the state auditor; adding new sections to chapter 43.09 RCW; adding new sections to chapter 43.131 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. Sections 1 through 8 of this act shall be known and cited as the inspector general act of 1996.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout sections 1 through 8 of this act.

(1) "Fraud or abuse" means any criminal or administrative misconduct by staff, contractors, and vendors in any program or service administered by the department of social and health services. This does not include provider fraud as it relates to the department of social and health services' administration of funds pursuant to Title XIX of the social security act, medicaid.

(2) "Office" means the office of the inspector general.

NEW SECTION. Sec. 3. The office of inspector general is established within the office of the state auditor. The state auditor must appoint a person to head the office who is known as the inspector general. The auditor's appointment must be based solely on the basis of integrity and demonstrated ability in law enforcement management, public administration, and investigations.

NEW SECTION. Sec. 4. The mission of the inspector general and the office of inspector general is to:

(1) Conduct and supervise independent and objective investigations relating to allegations of fraud or abuse within, or in programs administered by, the department of social and health services;

(2) Provide leadership and coordination in recommending policies and procedures designed to detect and prevent fraud or abuse; and

(3) Provide a method of informing the secretary of the department of social and health services, the legislature, and the public about fraud or abuse identified by the inspector general or the office of the state auditor and the corrective action taken to deal with it.

NEW SECTION. Sec. 5. (1) It is the duty of the inspector general to:

(a) Conduct, supervise, coordinate, and provide policy direction for fraud or abuse investigations;

(b) Review and make recommendations regarding existing and proposed legislation and rules relating to the programs and operations of the department of social and health services as it relates to fraud and abuse;

(d) Recommend policies for, and conduct, supervise, and coordinate, relationships between the department of social and health services and federal, state, and local governmental agencies, and nongovernmental entities, with respect to: (i) Matters relating to the prevention and detection of fraud or abuse; or (ii) the identification and prosecution of participants in the fraud or abuse; and

(e) Keep the secretary of the department of social and health services, the legislature, and the public informed by means of reports concerning fraud or abuse, the recommendations of the inspector general to deal with the fraud or abuse, and the progress of the corrective action taken to deal with it.

(2) In carrying out the duties and responsibilities established in sections 2 through 8 of this act, the inspector general must refer to the appropriate prosecuting authority, for possible criminal prosecution, all investigations in which the inspector general concludes that there is probable cause to believe that a violation of federal or state criminal law has occurred. The inspector general may also recommend that the appropriate prosecuting attorney petition a special inquiry judge as provided in RCW 10.27.170.

NEW SECTION. Sec. 6. (1) The inspector general must submit a report summarizing the activities of the office to the appropriate committees of the senate and house of representatives by January 1, 1997, and biennially thereafter. The report shall contain only disclosable information, including:

(a) A description of instances of fraud or abuse discovered as a result of inspector general investigations completed during the reporting period;

(b) Recommendations for improving the activities of the office with respect to the instances of fraud or abuse identified under (a) of this subsection;

(c) An identification of each significant recommendation described in the previous reports on which corrective action has or has not been completed; and

(d) A summary of matters referred to prosecution authorities during the reporting period and the charges filed and convictions entered during the reporting period that have resulted from referrals by the office.

The term "disclosable information" means public information that may be disclosed by the office without violation of any law.

(2) The inspector general must forward a draft of the report to the secretary of the department of social and health services not less than twenty days prior to the date that the report is to be issued.

NEW SECTION. Sec. 7. (1) In carrying out the provisions of sections 2 through 8 of this act, the inspector general is authorized to:

(a) Have prompt access to all individuals, records, electronic data, reports, audits, reviews, documents, and other materials available to the department of social and health services that relate to investigations of the office that are not otherwise prohibited from disclosure to the inspector general;

(b) Request information or assistance as may be necessary for carrying out the duties and responsibilities provided by sections 2 through 8 of this act from a federal, state, or local governmental agency or unit of a governmental agency;

(c) Issue subpoenas for witnesses, documents, information, and other data necessary in the furtherance of an investigation conducted by the office. The subpoenas are enforceable under RCW 34.05.588. Prior to issuing subpoenas to a state agency, the inspector general must make a reasonable request to the agency for documents and information in possession of the agency;

(d) Administer oaths and take testimony, if necessary, in the performance of the duties and responsibilities provided in sections 2 through 8 of this act, unless otherwise prohibited by law;

(e) To the extent and in amounts as may be provided by appropriations, enter into contracts and other arrangements for audits, studies, analyses, and other services with public agencies and with private persons, and make payments necessary to carry out the provisions of sections 2 through 8 of this act, subject to approval of the state auditor and in compliance with civil service laws, collective bargaining agreements, and other applicable law.

(2) The state auditor is authorized to:

(a) To the extent and in amounts as may be provided by appropriations, employ personnel as may be necessary to carry out the provisions of sections 2 through 8 of this act;

(b) To the extent and in amounts as may be provided by appropriations, purchase or lease facilities, equipment, and supplies necessary to carry out the provisions of sections 2 through 8 of this act; and

NEW SECTION. Sec. 8. (1) The inspector general may receive and investigate complaints or information from an employee of the department of social and health services concerning improper governmental action as defined in RCW 42.40.020(3). These activities are deemed to constitute fraud or abuse for the purposes of sections 2 through 8 of this act. If the inspector general concludes that the complaint has been made in bad faith, for purposes of harassment, or is frivolous, the complaint need not be investigated.

(2) Except as otherwise required by state law, the inspector general must not, after receipt of a complaint or information from an employee, disclose the identity of the employee without the consent of the employee, unless the inspector general determines that disclosure is unavoidable during the course of investigation, except as otherwise provided by state law.

(3) An employee who has authority to take, direct others to take, recommend, or approve personnel action, must not, with respect to the authority, take or threaten to take action against an employee as a reprisal for making a complaint or disclosing information to the inspector general, unless the complaint was made with willful disregard for its truth or falsity.

(4) The provisions of RCW 42.40.050 regarding retaliation shall apply to an employee who in good faith reports improper governmental action under subsection (1) of this section.

(5) The inspector general may also investigate complaints filed with the office by persons who are not employees of the department of social and health services. However, this duty to investigate does not extend to a complaint where the inspector general finds that the complaint's allegations, if true, would not constitute fraud or abuse.

NEW SECTION. Sec. 9. Sections 1 through 8 of this act are each added to chapter 43.09 RCW.

NEW SECTION. Sec. 10. A new section is added to chapter 43.131 RCW to read as follows:

The inspector general program and its powers and duties shall be terminated on June 30, 2001, as provided in section 11 of this act.

NEW SECTION. Sec. 11. A new section is added to chapter 43.131 RCW to read as follows:

The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 2002:

(1) Section 1 of this act;

(2) Section 2 of this act;

(3) Section 3 of this act;

(4) Section 4 of this act;

(5) Section 5 of this act;

(6) Section 6 of this act;

(7) Section 7 of this act; and

(8) Section 8 of this act.

NEW SECTION. Sec. 12. This act shall take effect July 1, 1996.